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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

Or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-36020

Onconova Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

Delaware

    

22-3627252

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

12 Penns Trail, Newtown, PA

18940

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (267) 759-3680

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes   No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes   No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes   No

The number of outstanding shares of the registrant’s Common Stock, par value $0.01 per share, as of August 1, 2022 was 20,895,563.

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common Stock, par value $.01 per share

ONTX

The Nasdaq Stock Market LLC

Table of Contents

ONCONOVA THERAPEUTICS, INC.

 

TABLE OF CONTENTS FOR QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2022

 

Page

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

3

Condensed Consolidated Balance Sheets

3

Condensed Consolidated Statements of Operations

4

Condensed Consolidated Statements of Comprehensive Loss

5

Consolidated Statement of Stockholders’ Equity (Deficit)

6

Condensed Consolidated Statements of Cash Flows

7

Notes to Condensed Consolidated Financial Statements

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

Item 3. Quantitative and Qualitative Disclosures About Market Risk

31

Item 4. Controls and Procedures

31

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

32

Item 1A. Risk Factors

32

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

32

Item 3. Defaults Upon Senior Securities

32

Item 4. Mine Safety Disclosures

32

Item 5. Other Information

32

Item 6. Exhibits

33

SIGNATURES

34

All common stock, equity, share and per share amounts have been retroactively adjusted to reflect a one-for-fifteen reverse stock split which was effective May 20, 2021.

2

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Onconova Therapeutics, Inc.

Condensed Consolidated Balance Sheets

June 30, 

December 31, 

2022

2021

Assets

(unaudited)

Current assets:

Cash and cash equivalents

$

46,533,000

$

55,070,000

Receivables

 

28,000

 

28,000

Prepaid expenses and other current assets

 

1,472,000

 

332,000

Total current assets

 

48,033,000

 

55,430,000

Property and equipment, net

 

31,000

 

38,000

Other non-current assets

 

10,000

 

10,000

Total assets

$

48,074,000

$

55,478,000

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

3,003,000

$

2,757,000

Accrued expenses and other current liabilities

 

3,231,000

 

3,132,000

Deferred revenue

 

226,000

 

226,000

Total current liabilities

 

6,460,000

 

6,115,000

Deferred revenue, non-current

 

3,130,000

 

3,243,000

Total liabilities

 

9,590,000

 

9,358,000

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $0.01 par value, 5,000,000 shares authorized, none issued and outstanding at June 30, 2022 and December 31, 2021

 

 

Common stock, $0.01 par value, 125,000,000 shares authorized, 20,895,563 shares issued and outstanding at June 30, 2022 and December 31, 2021

 

209,000

 

209,000

Additional paid in capital

 

491,181,000

 

490,644,000

Accumulated deficit

 

(452,865,000)

 

(444,719,000)

Accumulated other comprehensive loss

 

(41,000)

 

(14,000)

Total stockholders’ equity

 

38,484,000

 

46,120,000

Total liabilities and stockholders’ equity

$

48,074,000

$

55,478,000

See accompanying notes to condensed consolidated financial statements.

3

Table of Contents

Onconova Therapeutics, Inc.

Condensed Consolidated Statements of Operations (unaudited)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2022

    

2021

    

2022

    

2021

    

Revenue

$

57,000

$

57,000

$

113,000

$

113,000

Operating expenses:

General and administrative

 

2,139,000

 

2,850,000

 

4,325,000

 

5,067,000

Research and development

 

2,038,000

 

1,852,000

 

4,040,000

 

3,789,000

Total operating expenses

 

4,177,000

 

4,702,000

 

8,365,000

 

8,856,000

Loss from operations

 

(4,120,000)

 

(4,645,000)

 

(8,252,000)

 

(8,743,000)

Change in fair value of warrant liability

 

 

427,000

 

 

(209,000)

Other income, net

 

96,000

 

(13,000)

 

106,000

 

6,000

Net loss

$

(4,024,000)

$

(4,231,000)

$

(8,146,000)

$

(8,946,000)

Net loss per share, basic and diluted

$

(0.19)

$

(0.27)

$

(0.39)

$

(0.59)

Basic and diluted weighted average shares outstanding

 

20,904,085

 

15,780,863

 

20,904,085

 

15,201,719

See accompanying notes to condensed consolidated financial statements.

4

Table of Contents

Onconova Therapeutics, Inc.

Condensed Consolidated Statements of Comprehensive Loss (unaudited)

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2022

    

2021

    

2022

    

2021

    

Net loss

$

(4,024,000)

$

(4,231,000)

$

(8,146,000)

$

(8,946,000)

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustments, net

 

(20,000)

 

4,000

 

(27,000)

 

(12,000)

Other comprehensive (loss) income, net of tax

(20,000)

4,000

(27,000)

(12,000)

Comprehensive loss

$

(4,044,000)

$

(4,227,000)

$

(8,173,000)

$

(8,958,000)

See accompanying notes to condensed consolidated financial statements.

5

Table of Contents

Onconova Therapeutics, Inc.

Consolidated Statement of Stockholders’ Equity (Deficit) (unaudited)

Three Month Periods Ended June 30, 2022 and 2021

Accumulated

Additional

other

Common Stock

Paid in

Accumulated

comprehensive

    

Shares

    

Amount

    

Capital

    

deficit

    

(loss) income

    

Total

Balance at March 31, 2022

20,895,563

$

209,000

$

490,940,000

$

(448,841,000)

$

(21,000)

$

42,287,000

Net loss

 

 

 

 

(4,024,000)

 

 

(4,024,000)

Other comprehensive loss

 

 

 

 

 

(20,000)

 

(20,000)

Stock-based compensation

 

 

 

241,000

 

 

 

241,000

Balance at June 30, 2022

20,895,563

$

209,000

$

491,181,000

$

(452,865,000)

$

(41,000)

$

38,484,000

Balance at March 31, 2021

15,779,160

$

158,000

$

470,268,000

$

(433,271,000)

$

(2,000)

$

37,153,000

Net loss

 

 

 

 

(4,231,000)

 

 

(4,231,000)

Other comprehensive loss

 

 

 

 

 

4,000

 

4,000

Exercise of stock options

1,776

 

 

7,000

 

 

 

7,000

Stock-based compensation

 

 

 

60,000

 

 

 

60,000

Shares issued in connection with reverse stock split

104

 

 

 

 

 

Balance at June 30, 2021

15,781,040

$

158,000

$

470,335,000

$

(437,502,000)

$

2,000

$

32,993,000

Six Month Periods Ended June 30, 2022 and 2021

Accumulated

Additional

other

Common Stock

Paid in

Accumulated

comprehensive

    

Shares

    

Amount

    

Capital

    

deficit

    

income (loss)

    

Total

Balance at December 31, 2021

20,895,563

$

209,000

$

490,644,000

$

(444,719,000)

$

(14,000)

$

46,120,000

Net loss

 

 

 

 

(8,146,000)

 

 

(8,146,000)

Other comprehensive loss

 

 

 

 

 

(27,000)

 

(27,000)

Stock-based compensation

 

 

 

537,000

 

 

 

537,000

Balance at June 30, 2022

20,895,563

$

209,000

$

491,181,000

$

(452,865,000)

$

(41,000)

$

38,484,000

Balance at December 31, 2020

12,396,219

$

124,000

$

434,593,000

$

(428,556,000)

$

14,000

$

6,175,000

Net loss

 

 

 

 

(8,946,000)

 

 

(8,946,000)

Other comprehensive loss

 

 

 

 

 

(12,000)

 

(12,000)

Exercise of stock options

4,642

 

 

24,000

 

 

 

24,000

Stock-based compensation

 

 

 

125,000

 

 

 

125,000

Shares issued in connection with reverse stock split

104

 

 

 

 

 

Issuance of common stock, net

3,220,075

 

32,000

 

35,115,000

 

 

 

35,147,000

Issuance of common stock upon exercise of warrants

160,000

2,000

478,000

480,000

Balance at June 30, 2021

15,781,040

$

158,000

$

470,335,000

$

(437,502,000)

$

2,000

$

32,993,000

See accompanying notes to condensed consolidated financial statements.

6

Table of Contents

Onconova Therapeutics, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

Six Months Ended June 30, 

    

2022

    

2021

    

Operating activities:

Net loss

$

(8,146,000)

$

(8,946,000)

Adjustment to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

 

7,000

 

7,000

Change in fair value of warrant liabilities

209,000

Stock compensation expense

 

537,000

 

125,000

Changes in assets and liabilities:

Receivables

 

 

10,000

Prepaid expenses and other current assets

 

(1,140,000)

 

265,000

Other assets

10,000

Accounts payable

 

246,000

 

(543,000)

Accrued expenses and other current liabilities

 

99,000

 

(1,979,000)

Deferred revenue

 

(113,000)

 

(113,000)

Net cash used in operating activities

 

(8,510,000)

 

(10,955,000)

Financing activities:

Proceeds from the sale of common stock and warrants, net of costs

35,147,000

Proceeds from the exercise of common warrants

480,000

Proceeds from the exercise of stock options

 

 

24,000

Net cash provided by financing activities

 

 

35,651,000

Effect of foreign currency translation on cash

 

(27,000)

 

(12,000)

Net (decrease) increase in cash and cash equivalents

 

(8,537,000)

 

24,684,000

Cash and cash equivalents at beginning of period

 

55,070,000

 

19,025,000

Cash and cash equivalents at end of period

$

46,533,000

$

43,709,000

See accompanying notes to condensed consolidated financial statements.

7

Table of Contents

Onconova Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Nature of Business

The Company

Onconova Therapeutics, Inc. (the “Company”) was incorporated in the State of Delaware on December 22, 1998 and commenced operations on January 1, 1999. The Company’s headquarters are located in Newtown, Pennsylvania. The Company is a clinical-stage biopharmaceutical company focused on discovering and developing novel products for patients with cancer. The Company has proprietary molecularly targeted agents designed to disrupt specific cellular pathways that are important for cancer cell proliferation. The Company believes that the product candidates in its pipeline have the potential to be efficacious in a variety of cancers with unmet medical need. The Company has the following two clinical-stage programs: 1. narazaciclib (ON 123300), a multi-targeted kinase inhibitor in solid tumors and hematological malignancies as a single agent or in combination with other anti-cancer therapies; and 2. rigosertib administered alone or in combination for the treatment of solid tumors. During 2012, Onconova Europe GmbH was established as a wholly owned subsidiary of the Company for the purpose of further developing business in Europe.

On May 20, 2021, the Company amended its certificate of incorporation to decrease the number of authorized shares of common stock par value $0.01 per share from 250,000,000 to 125,000,000, and to effect a one-for-fifteen reverse stock split of its common stock. All common stock, equity, share and per share amounts in the financial statements and notes have been retroactively adjusted to reflect this one-for-fifteen reverse stock split.

Liquidity

The Company has incurred recurring operating losses since inception. For the six months ended June 30, 2022, the Company incurred a net loss of $8,146,000 and as of June 30, 2022 the Company had generated an accumulated deficit of $452,865,000. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to research, development of its product candidates and its preclinical programs, strategic alliances and its administrative organization. At June 30, 2022, the Company had cash and cash equivalents of $46,533,000. The Company will require substantial additional financing to fund its ongoing clinical trials and operations, and to continue to execute its strategy.

The Company has and may continue to delay, scale-back, or eliminate certain of its research and development activities and other aspects of its operations until such time as the Company is successful in securing additional funding. The Company is exploring various dilutive and non-dilutive sources of funding, including equity financings, strategic alliances, business development and other sources. The future success of the Company is dependent upon its ability to obtain additional funding. There can be no assurance, however, that the Company will be successful in obtaining such funding in sufficient amounts, on terms acceptable to the Company, or at all. The Company believes that its cash and cash equivalents will be sufficient to fund its ongoing trials and business operations for more than twelve months from the date of this filing.

COVID-19

While the Company is not aware of a material impact from the novel coronavirus disease (“COVID-19”) pandemic through June 30, 2022, the full extent to which COVID-19 will directly or indirectly impact the Company’s business, results of operations and financial condition, including manufacturing, clinical trials and research and development costs, depends on future developments that are uncertain at this time.

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Onconova Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

2. Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Certain information and footnotes normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The financial statements include the consolidated accounts of the Company and its wholly-owned subsidiary, Onconova Europe GmbH. All significant intercompany transactions have been eliminated.

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of June 30, 2022, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2022 and 2021, the consolidated statements of stockholders’ equity (deficit) for the three and six months ended June 30, 2022 and 2021 and the condensed consolidated statements of cash flows for the six months ended June 30, 2022 and 2021 are unaudited. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2022, the results of its operations for the three and six months ended June 30, 2022 and 2021, and its cash flows for the six months ended June 30, 2022 and 2021. The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2022 and 2021 are unaudited. The results for the three and six months ended June 30, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods, or any future year or period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2021 included in the Company’s annual report on Form 10-K filed with the SEC on March 21, 2022.

All common stock, equity, share and per share amounts in the financial statements and notes have been retroactively adjusted to reflect a one-for-fifteen reverse stock split which was effective May 20, 2021.

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one segment, which is the identification and development of oncology therapeutics.

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2021 included in the Company’s annual report on Form 10-K filed with the SEC on March 21, 2022. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies.

Fair Value Measurements

The carrying amounts reported in the accompanying consolidated financial statements for cash and cash equivalents, accounts payable, and accrued liabilities approximate their respective fair values because of the short-term nature of these accounts. The fair value of the warrant liability is discussed in Note 7, “Fair Value Measurements.”

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Onconova Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

Recent Accounting Pronouncements

In June 2016, the FASB issued new guidance on the accounting for credit losses on financial instruments. The guidance was amended in November 2019. The new guidance introduces an expected loss model for estimating credit losses, replacing the incurred loss model. The new guidance also changes the impairment model for available-for-sale debt securities, requiring the use of an allowance to record estimated credit losses (and subsequent recoveries). The guidance is effective for the Company in fiscal years beginning after December 15, 2022, and interim periods within those years, with early adoption permitted. The guidance is not expected to have a material effect on the Company.

3. Revenue

The Company’s revenue during the three and six months ended June 30, 2022 and 2021 was from its license and collaboration agreement with SymBio.

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2022

    

2021

    

2022

    

2021

    

Symbio

Upfront license fee recognition over time

$

57,000

$

57,000

$

113,000

$

113,000

Deferred revenue is as follows:

Symbio

    

Upfront Payment

Deferred balance at December 31, 2021

$

3,469,000

Recognition to revenue

(113,000)

Deferred balance at June 30, 2022

$

3,356,000

4. Net Loss Per Share of Common Stock

The following potentially dilutive securities outstanding at June 30, 2022 and 2021 have been excluded from the computation of diluted weighted average shares outstanding, as they would be antidilutive (reflects the number of common shares as if the dilutive securities had been converted to common stock):

June 30, 

    

2022

    

2021

Warrants

 

491,586

 

512,202

Stock options

 

850,553

 

43,026

 

1,342,139

 

555,228

5. Warrants

Common Stock warrants are accounted for in accordance with applicable accounting guidance provided in ASC Topic 815, Derivatives and Hedging - Contracts in Entity’s Own Equity (ASC Topic 815), as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement.

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Onconova Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

Warrants outstanding and warrant activity (reflects the number of common shares as if the warrants were converted to common stock) for the six months ended June 30, 2022 is as follows:

Balance

Balance

Exercise

Expiration

December 31, 

Warrants

Warrants

Warrants

June 30, 

Description

    

Classification

    

Price

    

Date

    

2021

    

Issued

    

Exercised

    

Expired

    

2022

Non-tradable pre-funded warrants

 

Equity

$

2.25

 

July 2023

 

26

 

 

 

 

26

Non-tradable warrants

Equity

$

24.00

December 2022

26,189

26,189

Non-tradable pre-funded warrants

Equity

$

2.25

none

3,522

3,522

Non-tradable warrants

Equity

$

24.00

December 2022

120,407

120,407

Non-tradable pre-funded warrants

Equity

$

2.25

none

4,974

4,974

Non-tradable warrants

Equity

$

30.00

September 2023

7,306

7,306

Non-tradable warrants

Equity

$

3.00

November 2024

244,500

244,500

Non-tradable warrants

Equity

$

6.54375

December 2024

16,953

16,953

Non-tradable warrants

Equity

$

6.75450

December 2024

46,263

46,263

Non-tradable warrants

Equity

$

6.77850

December 2023

29,968

29,968

500,108

500,108

6. Balance Sheet Detail

Prepaid expenses and other current assets:

June 30, 

December 31, 

    

2022

    

2021

Research and development

$

1,050,000

$

15,000

Manufacturing

 

31,000

 

29,000

Insurance

 

85,000

 

253,000

Other

 

306,000

 

35,000

$

1,472,000

$

332,000

Property and equipment:

June 30, 

December 31, 

    

2022

    

2021

Property and equipment

$

70,000

$

70,000

Accumulated depreciation

 

(39,000)

 

(32,000)

$

31,000

$

38,000

Accrued expenses and other current liabilities:

June 30, 

December 31, 

    

2022

    

2021

Research and development

$

1,968,000

$

1,759,000

Employee compensation

 

1,054,000

 

1,217,000

Professional fees

209,000

156,000

$

3,231,000

$

3,132,000

7. Fair Value Measurements

At both June 30, 2022 and December 31, 2021, the Company had no financial assets and liabilities measured at fair value on a recurring basis.

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Onconova Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company utilizes a valuation hierarchy for disclosure of the inputs to the valuations used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

During 2021, the Company had tradable warrants and non-tradable warrants that were classified as liabilities and measured at fair value on a recurring basis. The tradable warrants were listed on the Nasdaq Capital Market. The Company determined that an active and orderly market for the tradable warrants developed and that the Nasdaq Capital Market price was the best indicator of fair value of the warrant liability. The quoted market price was used to determine the fair value. The fair value of the non-tradable warrants was estimated using the Black-Scholes pricing model. All of these tradable and non-tradable warrants expired in July 2021. During the three and six months ended June 30, 2021, there was a decrease (increase) in the fair value of the warrant liability of $427,000 and ($209,000), respectively.

8. Stock-Based Compensation

The 2018 Omnibus Incentive Compensation Plan (the “2018 Plan”) was unanimously approved by the Company’s Board of Directors on May 24, 2018 and was approved by the Company’s stockholders on June 27, 2018.

Under the 2018 Plan, the Company may grant incentive stock options, non-qualified stock options, stock awards, stock units, stock appreciation rights and other stock-based awards to employees, non-employee directors and consultants, and advisors. The maximum aggregate number of shares of the Company’s common stock that may be issued under the 2018 Plan is 26,823.

The 2018 Plan was amended and restated following unanimous approval of the Company’s Board of Directors on April 24, 2019 and was approved by the Company’s shareholders on June 17, 2019. The amended 2018 Plan (the “Amended Plan”) allowed for an additional 39,300 shares of the Company’s common stock that may be issued under the Amended Plan with respect to awards made on and after June 17, 2019.

The 2021 Incentive Compensation Plan (the “2021 Plan”) was unanimously approved by the Company’s shareholders on July 30, 2021. Upon stockholders’ approval of the 2021 Plan, no further awards will be made under the amended 2018 Plan. Under the 2021 Plan, the Company may grant incentive stock options, non-qualified stock options, stock awards, stock units, stock appreciation rights and other stock-based awards to employees, non-employee directors and consultants, and advisors. The maximum aggregate number of shares of the Company’s common stock that may be issued under the 2021 Plan is 1,300,000. At June 30, 2022, there were 258,337 shares available for future issuance.

Stock-based compensation expense includes stock options granted to employees and non-employees and has been reported in the Company’s statements of operations and comprehensive loss in either research and development expenses or general and administrative expenses depending on the function performed by the optionee. No net tax benefits related to the stock-based compensation costs have been recognized since the Company’s inception. The

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Onconova Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

Company recognized stock-based compensation expense related to stock options and restricted stock units as follows for the three and six months ended June 30, 2022 and 2021:

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2022

    

2021

    

2022

    

2021

    

General and administrative

$

72,000

$

43,000

$

259,000

$

99,000

Research and development

169,000

17,000

278,000

26,000

$

241,000

$

60,000

$

537,000

$

125,000

A summary of stock option activity for the six months ended June 30, 2022 is as follows:

    

Options Outstanding

Weighted

Weighted-

Average

Average

Remaining

Aggregate

Number

Exercise

Contractual

Intrinsic

    

    

of Shares

    

Price

    

Term (in years)

    

Value

Balance, December 31, 2021

 

452,999

$

20.71

 

9.42

$

Authorized

Granted

 

491,825

$

1.75

9.66

 

Exercised

 

$

$

Forfeitures/adjustments

 

(94,271)

$

3.37

 

Balance, June 30, 2022

 

850,553

$

11.67

 

9.26

$

Exercisable at June 30, 2022

 

40,302

$

179.88

 

6.51

$

The Company accounts for all stock-based payments made to employees, non-employees and directors using an option pricing model for estimating fair value. Accordingly, stock-based compensation expense is measured based on the estimated fair value of the awards on the date of grant, net of forfeitures. Compensation expense is recognized for the portion that is ultimately expected to vest over the period during which the recipient renders the required services to the Company using the straight-line single option method.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options at the grant date. The Black-Scholes model requires the Company to make certain estimates and assumptions, assumptions related to the expected price volatility of the Common Stock, the period during which the options will be outstanding, the rate of return on risk-free investments and the expected dividend yield for the Company’s stock.

As of June 30, 2022, there was $2,166,000 of unrecognized compensation expense related to the unvested stock options which is expected to be recognized over a weighted-average period of approximately 2.33 years.

The weighted-average assumptions underlying the Black-Scholes calculation of grant date fair value of stock options include the following:

Six months ended June 30, 

    

2022

    

2021

 

    

Risk-free interest rate

 

2.01

%  

1.02

%  

 

Expected volatility

 

121.49

%  

123.32

%  

 

Expected term

 

5.85

years  

6.25

years

 

Expected dividend yield

 

0

%  

0

%  

 

Weighted average grant date fair value

$

1.51

$

0.25

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Onconova Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

The weighted-average valuation assumptions were determined as follows:

Risk-free interest rate: The Company based the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term.

Expected term of options: Due to its lack of sufficient historical data, the Company estimates the expected life of its employee stock options using the “simplified” method, as prescribed in Staff Accounting Bulletin (SAB) No. 107, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option.

Expected stock price volatility: Expected volatility is based on the historical volatility of the Company’s Common Stock.

Expected annual dividend yield: The Company has never paid, and does not expect to pay, dividends in the foreseeable future. Accordingly, the Company assumed an expected dividend yield of 0.0%.

On August 2, 2021, the compensation committee of the board of directors approved restricted stock unit grants to the Company’s employees (“2021 RSU”). An aggregate of 104,700 service-based RSUs were issued at a grant date fair value of $5.19. The 2021 RSU awards will be settled in stock, vest 33% on each of the first and second anniversary of the date of grant, and vest 34% on the third anniversary of the date of grant. The 2021 RSU awards were granted under the 2021 Plan. There were no vesting events, expirations, forfeitures, or cancelations of the 2021 RSUs during the period. On February 7, 2022, the compensation committee of the board of directors approved restricted stock unit grants to the Companies employees (“2022 RSU”). An aggregate of 148,343 service-based RSUs were issued at a grant date fair value of $1.82. The 2022 RSU awards will be settled in stock, vest 33% on each of the first and second anniversary of the date of grant, and vest 34% on the third anniversary of the date of grant. The 2021 RSU and 2022 RSU awards were granted under the 2021 Plan. There were no vesting events, expirations, or cancelations of the 2021 RSU or 2022 RSU during the period. There were forfeitures of 31,033 RSUs during the six months ended June 30, 2022. At June 30, 2022, the unrecognized compensation cost related to unvested service-based RSUs was $568,000, which will be recognized over the remaining service period.

Grants of PSUs and SARs

On July 9, 2020, the compensation committee of the board of directors and the board approved a cash bonus program of cash-settled stock appreciation right (“2020 SAR”) awards and cash-settled performance stock unit (“2020 PSU”) awards to the Company’s employees. An aggregate of 2020 SAR awards with respect to 256,713 shares of common stock and 2020 PSU awards with respect to 124,220 shares of common stock were granted to the Company’s employees. The 2020 SAR awards will be settled in cash, vest 33% on the first anniversary of the date of grant, and the remaining 67% monthly over the next 24 months, have a per-share base amount of $8.40, which was the closing sales price of a share of the Company’s common stock on the grant date, and are in all cases subject to the terms and conditions of the Company’s form of SAR award agreement. The 2020 SAR awards are cash-settled and were granted outside of the 2018 Plan and the 2021 Plan.

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Onconova Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

The 2020 PSU awards vest 50% upon the submission of a new drug application (“NDA”) to the U.S. FDA for rigosertib in higher-risk myelodysplastic syndromes (“HR-MDS”) and 50% upon U.S. FDA approval of rigosertib for HR-MDS. The 2020 PSU awards have a maximum value of $21.60 per share. The maximum price per share is the per-share value based on the Company’s market capitalization at $250 million and the Company’s outstanding shares of common stock, which was 11,611,829 shares on July 9, 2020. In all cases, the 2020 PSU awards are subject to the terms and conditions of the Company’s form of PSU award agreement. The 2020 PSU awards are cash-settled and were granted outside of the 2018 Plan and the 2021 Plan.

In addition, on July 9, 2020, based on the recommendation of the compensation committee, the board approved a change in the non-employee director compensation policy that would provide for an annual SAR award (“2020 Director SAR”) with respect to 8,333 shares of common stock for each of the Company’s non-employee directors. No other changes to the non-employee director compensation policy were approved and, on July 9, 2020, the Board approved the initial 8,333 2020 Director SAR award to each of the non-employee directors for an aggregate total of 58,333 2020 Directors SAR awards granted. The 2020 Director SAR awards vest on the first anniversary of grant subject to the director’s continued service and will be settled in cash, have a per-share base amount of $8.40, and are in all cases subject to the terms and conditions of the Company’s form of 2020 Director SAR award agreement.

Each SAR subject to a 2020 SAR award represents the right to a cash payment equal to the excess, if any, of (i) the fair market value of each underlying share of the Company’s common stock, determined on the date of exercise of the SAR minus (ii) the base amount. Pursuant to the terms of the SAR awards, in no event may the cash payment for each SAR exceed $13.20, which is the maximum price per share of $21.60, minus the base amount of $8.40, subject to adjustment in accordance with the terms of the Stock Appreciation Right Award Agreement. The maximum price per share is the per-share value based on the Company’s market capitalization at $250 million and the Company’s outstanding shares of common stock, which was 11,611,829 shares on July 9, 2020.

On February 17, 2021, the compensation committee of the board of directors and the board approved a cash bonus program of cash-settled stock appreciation right (“2021 SAR”) awards and cash-settled performance stock unit (“2021 PSU”) awards to the Company’s employees. An aggregate of 2021 SAR awards with respect to 100,000 shares of common stock and 2021 PSU awards with respect to 100,000 shares of common stock were granted to the Company’s employees. The 2021 SAR awards will be settled in cash, vest 33% on the first anniversary of the date of grant, and the remaining 67% monthly over the next 24 months, have a per-share base amount of $22.65, which was the closing sales price of a share of the Company’s common stock on the grant date, and are in all cases subject to the terms and conditions of the Company’s form of SAR award agreement. Each SAR subject to a 2021 SAR award represents the right to a cash payment equal to the excess, if any, of (i) the fair market value of each underlying share of the Company’s common stock, determined on the date of exercise of the 2021 SAR minus (ii) the base amount. Pursuant to the terms of the 2021 SAR awards, in no event may the cash payment for each SAR exceed $15.45, which is the maximum price per share of $38.10, minus the base amount of $22.65, subject to adjustment in accordance with the terms of the Stock Appreciation Right Award Agreement. The maximum price per share is the per-share value based on the Company’s market capitalization at $600 million and the Company’s outstanding shares of common stock, which was 15,767,492 shares on February 17, 2021. The 2021 SAR awards are cash-settled and were granted outside of the 2018 Plan and the 2021 Plan.

The 2021 PSU awards vest 20% upon the initiation of a new clinical program with an in-licensed compound, 20% for reaching the recommended Phase 2 dose for any compound, 20% for the first patient enrolled in the expansion cohort of the Phase 1 ON123300 clinical trial, 20% for the first patient enrolled in a registrational study for any compound, and 20% for the topline data of a registrational study for any compound. The 2021 PSU awards have a maximum value of $38.10 per share. The maximum price per share is the per-share value based on the Company’s approximate market capitalization at $600 million and the Company’s outstanding shares of common stock, which was 15,767,492 shares on February 17, 2021. In all cases, the 2021 PSU awards are subject to the terms and conditions of the

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Onconova Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

Company’s form of PSU award agreement. The 2021 PSU awards are cash-settled and were granted outside of the 2018 Plan and the 2021 Plan.

The fair value of the 2021and 2020 SARs granted has been estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions:

    

As of June 30, 2022

    

Risk-free interest rate

 

3.01

%  

Expected volatility

 

133.44

%  

Expected term

 

5.14

years  

Expected dividend yield

 

0

%  

During the three months ended June 30, 2022 and 2021, the Company recognized $15,000 and $476,000 related to the SARs and PSUs, respectively. During the six months ended June 30, 2022 and 2021, the Company recognized $1,000 of reversals of compensation expense and $521,000 of compensation expense related to the SARs and PSUs, respectively. The expense recognized in the 2021 periods includes approximately $442,000 of compensation expense resulting from the exercise of 2020 SARs during February 2021. As of June 30, 2022, the SARs and PSUs liability was $63,000 and is included in accrued expenses. As of June 30, 2022, there was $85,000 of unrecognized compensation cost related to the 2020 and 2021 SARs and PSUs.

9. Research Agreements

The Company has entered into various licensing and right-to-sublicense agreements with educational institutions for the exclusive use of patents and patent applications, as well as any patents that may develop from research being conducted by such educational institutions in the field of anticancer therapy, genes and proteins. Results from this research have been licensed to the Company pursuant to these agreements. Under one of these agreements with Temple University (“Temple”), the Company is required to make annual maintenance payments to Temple and royalty payments based upon a percentage of sales generated from any products covered by the licensed patents, with minimum specified royalty payments. As no sales had been generated through June 30, 2022 under the licensed patents, the Company has not incurred any royalty expenses related to this agreement. In addition, the Company is required to pay Temple a percentage of any sublicensing fees received by the Company.

10. Securities Registrations and Sales Agreements

January 2021 Offering

On January 7, 2021, the Company entered into a purchase agreement with certain institutional and accredited investors for the sale of an aggregate of 1,303,408 shares of the Company’s common stock, at a purchase price of $6.675 per share.

Under the purchase agreement, subject to certain exceptions, the Company is prohibited from effecting or entering into an agreement to effect any “variable rate transactions” as defined in the purchase agreement for a period of five years following the closing of the offering.

In connection with the offering, pursuant to the purchase agreement we reimbursed Lincoln Park Capital Fund, LLC, as the lead investor (“Lincoln Park”), an aggregate of $100,000 for expenses incurred in connection with the offering, including any due diligence expenses and legal fees. Furthermore, pursuant to the purchase agreement, we have granted Lincoln Park certain rights to participate at fair value with other investors in up to 50% of the amount of any

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Onconova Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

future offerings of common stock or securities exercisable for or convertible into common stock that the Company seeks to complete within one year after the closing of the offering, other than a firm commitment public offering.

The net proceeds to the Company from the offering, after deducting Lincoln Park’s expenses and other estimated offering expenses payable by the Company were approximately $8.5 million.

The shares sold in the offering were offered and sold by the Company directly to the investors, without a placement agent, underwriter, broker or dealer, pursuant to an effective shelf registration statement on Form S-3 (File No. 333-237844) declared effective by the SEC on May 18, 2020, and the base prospectus contained therein. The offering closed on January 11, 2021.

February 2021 Offering

On February 10, 2021, the Company entered into an underwriting agreement with Guggenheim Securities, LLC, as representative of several underwriters, for the public offering of 1,666,667 shares of the Company’s common stock, at a public offering price of $15.00 per share. Under the terms of the underwriting agreement, the Company granted the underwriters an option, exercisable for 30 days, to purchase up to an additional 250,000 shares of common stock at the same price. The option was exercised prior to closing.

In connection with the offering, the Company paid the underwriters a cash fee equal to 6% of the gross proceeds in the offering and $100,000 in legal fees and expenses.

The net proceeds to the Company from the offering, including exercise of the underwriters’ option, were approximately $26.7 million, after deducting fees and estimated offering expenses payable by the Company.

The offering was made pursuant to a registration statement (No. 333-237844) on Form S-3, which was initially filed by the Company with the SEC on April 24, 2020, amended on Form S-3/A that was filed with the SEC on May 15, 2020, and was declared effective by the SEC on May 18, 2020. The offering closed on February 16, 2021.

August 2021 Equity Distribution Agreement

On August 20, 2021, the Company entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”) with Piper Sandler & Co. (“Piper Sandler”) under which the Company may offer and sell, from time to time at its sole discretion, shares of the Company’s common stock, with aggregate gross sales proceeds of up to $25.0 million through an “at the market” equity offering program under which Piper Sandler is the sales agent.

Under the Equity Distribution Agreement, the Company has the right to set the parameters for the sale of shares, including the number of shares to be issued, the time period during which sales are requested to be made, limitations on the number of shares that may be sold in any one trading day and any minimum price below which sales may not be made. Subject to the terms and conditions of the Equity Distribution Agreement, Piper Sandler may sell the shares by methods deemed to be an “at the market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, including sales made through The Nasdaq Capital Market or any other trading market for our common stock. The Equity Distribution Agreement provides that Piper Sandler is entitled to compensation for its services equal to 3.0% of the gross proceeds of any shares of common stock sold through Piper Sandler under the Equity Distribution Agreement. The Company has no obligation to sell any shares under the Equity Distribution Agreement, and may at any time suspend solicitation and offers under the Equity Distribution Agreement. Through June 30, 2022, the Company sold 109,523 shares under the agreement at a weighted average price of $5.32 per share. Net proceeds after commissions and offering expenses were approximately $0.5 million. There were no shares sold by the Company under the agreement during the six months ended June 30, 2022.

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Onconova Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

The shares are issued pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-237844). The Company filed a prospectus supplement, dated August 20, 2021 with the Securities and Exchange Commission in connection with the offer and sale of the shares pursuant to the Equity Distribution Agreement.

September 2021 Offering

On September 23, 2021, the Company entered into an underwriting agreement with Guggenheim Securities, LLC, as representative of several underwriters, for the public offering of 5,000,000 shares of the Company’s common stock, at a public offering price of $4.20 per share. Under the terms of the underwriting agreement, the Company granted the underwriters an option, exercisable for 30 days, to purchase up to an additional 750,000 shares of common stock at the same price. The option was not exercised.

In connection with the offering, the Company paid the underwriters a cash fee equal to 6% of the gross proceeds in the offering and $100,000 in legal fees and expenses.

The net proceeds to the Company from the offering, including exercise of the underwriters’ option, were approximately $19.5 million, after deducting fees and estimated offering expenses payable by the Company.

The offering was made pursuant to a registration statement (No. 333-237844) on Form S-3, which was initially filed by the Company with the SEC on April 24, 2020, amended on Form S-3/A that was filed with the SEC on May 15, 2020, and was declared effective by the SEC on May 18, 2020. The offering closed on September 28, 2021.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with interim unaudited condensed consolidated financial statements contained in Part I, Item 1 of this quarterly report, and the audited consolidated financial statements and notes thereto for the year ended December 31, 2021 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our annual report on Form 10-K filed with the SEC on March 21, 2022. As used in this report, unless the context suggests otherwise, “we,” “us,” “our,” “the Company” or “Onconova” refer to Onconova Therapeutics, Inc. and its consolidated subsidiaries.

All common stock, equity, share and per share amounts have been retroactively adjusted to reflect a one-for-fifteen reverse stock split which was effective May 20, 2021.

Cautionary Note Regarding Forward-Looking Statements

This quarterly report on Form 10-Q includes forward-looking statements. We may, in some cases, use terms such as “believes,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should,” “approximately” or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Forward-looking statements appear in a number of places throughout this report and include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things, our ongoing and planned preclinical development and clinical trials, the timing of and our ability to make regulatory filings and obtain and maintain regulatory approvals for our product candidates, protection of our intellectual property portfolio, the degree of clinical utility of our products, particularly in specific patient populations, our ability to develop commercial and manufacturing functions, expectations regarding clinical trial data, our results of operations, cash needs, financial condition, liquidity, collaborations, partnerships, prospects, growth and strategies, the industry in which we operate and the trends that may affect the industry or us.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics and industry change, and depend on the economic circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. Although we believe that we have a reasonable basis for each forward-looking statement contained in this report, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this report. In addition, even if our results of operations, financial condition and liquidity, and events in the industry in which we operate are consistent with the forward-looking statements contained in this report, they may not be predictive of results or developments in future periods.

Actual results could differ materially from our forward-looking statements due to a number of factors, including risks related to:

our need for additional financing for our clinical-stage programs, continued product development and other operations, and our ability to obtain sufficient funds on acceptable terms when needed, and our plans and future needs to scale back operations if adequate financing is not obtained;

our estimates regarding expenses, future revenues, capital requirements and needs for additional financing;

the success and timing of our preclinical studies and clinical trials, including site initiation and patient enrollment, and regulatory approval of protocols for future clinical trials;

our ability to enter into, maintain and perform collaboration agreements with other pharmaceutical companies, for funding and commercialization of our clinical product candidates or preclinical compounds, and our ability to achieve certain milestones under those agreements;

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the difficulties in obtaining and maintaining regulatory approval of our product candidates, and the labeling under any approval we may obtain;

our plans and ability to develop, manufacture and commercialize our product candidates;

our failure to recruit or retain key scientific or management personnel or to retain our executive officers;

the size and growth of the potential markets for our product candidates and our ability to serve those markets;

regulatory developments in the United States and foreign countries;

the rate and degree of market acceptance of any of our product candidates;

obtaining and maintaining intellectual property protection for our product candidates and our proprietary technology;

the successful development of our commercialization capabilities, including sales and marketing capabilities;

recently enacted and future legislation and regulation regarding the healthcare system;

the success of competing therapies and products that are or become available;

our ability to maintain the listing of our securities on a national securities exchange;

the potential for third party disputes and litigation;

the performance of third parties, including contract research organizations (“CROs”) and third-party manufacturers; and

the impact of the novel coronavirus disease, COVID-19, to global economy and capital markets, and to our business and our financial results.

Any forward-looking statements that we make in this report speak only as of the date of such statement, and we undertake no obligation to update such statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

You should also read carefully the factors described in the “Risk Factors” in our most recent annual report on Form 10-K, to better understand significant risks and uncertainties inherent in our business and underlying any forward-looking statements. As a result of these factors, actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements in this report and you should not place undue reliance on any forward-looking statements.

Overview

We are a clinical-stage biopharmaceutical company focused on discovering and developing novel products for patients with cancer. We have proprietary molecularly targeted agents designed to disrupt specific cellular pathways that are important for cancer cell proliferation. We believe that the product candidates in our pipeline have the potential to be efficacious in a variety of cancers with unmet medical need. We have the following two clinical-stage programs: 1. narazaciclib (ON 123300), a multi-targeted kinase inhibitor in solid tumors and hematological malignancies as a single agent or in combination with other anti-cancer therapies; and 2. rigosertib administered alone or in combination for the treatment of solid tumors. We are currently evaluating potential compounds for in-licensing opportunities.

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Our net losses were $8.1 million and $8.9 million for the six months ended June 30, 2022 and 2021, respectively. As of June 30, 2022, we had an accumulated deficit of $452.9 million. We expect to incur significant expenses and operating losses for the foreseeable future as we continue the development of, and seek regulatory approval for, our product candidates, even if milestones under our license and collaboration agreements may be met. As of June 30, 2022, we had $46.5 million in cash and cash equivalents.

On January 12, 2021, we closed on an offering of common stock. We issued 1,303,408 shares of common stock and net proceeds were approximately $8.5 million. On February 16, 2021, we closed on an offering of common stock. We issued 1,916,667 shares of common stock and net proceeds were approximately $26.7 million. On September 28, 2021, we closed on an offering of common stock. We issued 5,000,000 shares of common stock and net proceeds were approximately $19.5 million.

On August 20, 2021, we entered into an at-the-market equity distribution agreement for the sale of up to $25.0 million of common stock. Through June 30, 2022, we sold 109,523 shares under the agreement at a weighted average price of $5.32 per share. Net proceeds after commissions and offering expenses were approximately $0.5 million.

On May 20, 2021, we amended our certificate of incorporation to effect a one-for-fifteen reverse stock split of our common stock. All common stock, equity, share and per share amounts in the financial statements and notes have been retroactively adjusted to reflect the reverse stock split.

On May 20, 2021, we amended our certificate of incorporation to decrease the number of authorized shares of common stock from 250,000,000 to 125,000,000.

We believe that our cash and cash equivalents of $46.5 million, at June 30, 2022, will be sufficient to fund our operations and ongoing trials for at least 18 months from the date of this filing. We do not have a recurring source of revenue to fund our operations and will need to raise additional funds to continue to develop and apply for regulatory approval for our drug candidates.

We are exploring various sources of funding for development and applying for regulatory approval of our research compounds as well as for our ongoing operations. If we raise additional funds through strategic collaborations and alliances or licensing arrangements with third parties, which may include existing collaboration partners, we may have to relinquish valuable rights to our technologies or product candidates or grant licenses on terms that are not favorable to us. There can be no assurance, however, that we will be successful in obtaining such financing in sufficient amounts, on terms acceptable to us, or at all. In addition, there can be no assurance that we will obtain approvals necessary to market our product candidates or achieve profitability or sustainable, positive cash flow. If we are unable to successfully raise sufficient additional capital, through future financings or through strategic and collaborative arrangements, we will not have sufficient cash to fund our ongoing trials and operations.

Product Candidates / Compounds

Narazaciclib (ON 123300) — Differentiated Multi-Kinase Inhibitor Targeting CDK4/6

Pursuant to a license agreement with Temple University dated January 1, 1999 as amended March 21, 2013, we licensed compounds including our product candidate narazaciclib from Temple University. Narazaciclib is a multi-targeted kinase inhibitor targeting cyclin-dependent kinases (CDK) 2, 4, 6, and 9, AMPK related protein kinase 5 (ARK5), and colony-stimulating factor 1 receptor (CSF1R) at low nM concentrations as well as other tyrosine kinases believed to drive tumor cell proliferation, survival and metastasis. As an apoptotic and antiproliferative agent, narazaciclib modulates the levels and activities of regulatory proteins of the cell cycle, including cyclin D1 and inhibits retinoblastoma (Rb) protein binding. Narazaciclib inhibits cancer cell growth and suppresses deoxyribonucleic acid (DNA) synthesis by preventing CDK-mediated G1-S phase transition, followed by tumor cell death by induction of mitochondria-mediated apoptosis. We believe, based on data from preclinical studies, that narazaciclib has the potential to overcome the limitations of the current generation of approved cyclin dependent kinase (CDK) 4/6 inhibitors. The below table depicts the half-maximal in vitro inhibitory concentration (IC50) of narazaciclib palbociclib, ribociclib and

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abemaciclib. IC50 is a quantitative measure indicating the concentration of each drug needed to inhibit, in vitro, these listed kinases by 50%. We believe our CDK inhibitor is differentiated from other agents in the market or in development due to its multi-targeted kinase inhibition profile.

Narazaciclib

Palbociclib

Ribociclib

Abemaciclib

Sponsor

Onconova